Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Strong growth in coffee pods boosts coffee sales
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- Figure 1: UK retail value sales of coffee*, 2011-21
- Microground helps reduce decline in instant coffee
- Ageing population who drink more coffee made at home
- Companies and brands
- Nestlé maintains big lead in instant coffee
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- Figure 2: Leading manufacturers’ shares in the UK retail instant coffee market, by value, 2015/16
- Taylors and Lavazza leading brands in ground coffee
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- Figure 3: Leading brands’ value shares in the UK ground coffee/coffee beans market*, 2015/16
- The consumer
- Nearly eight in 10 people drink coffee made at home
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- Figure 4: Types of coffee drunk at home, overall use and at least once a day, July 2016
- Strong brand loyalty among coffee buyers
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- Figure 5: Prompts that would encourage people to buy a different coffee type/brand, July 2016
- Room for more flavours and cold-brew coffee
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- Figure 6: Interest in trying different coffee products, July 2016
- Coffee shop culture influencing consumer tastes
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- Figure 7: Attitudes towards coffee, July 2016
- Room for more growth in coffee pod sales
- What we think
Issues and Insights
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- New flavours can help bolster the appeal of instant coffee to a younger audience
- The facts
- The implications
- Potential for more growth in coffee pods
- The facts
- The implications
- Brands and retailers can add value through encouraging more experimentation
- The facts
- The implications
The Market – What You Need to Know
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- Coffee sales boosted by strong growth in coffee pods
- Pods and coffee shop-style drinks offer more growth potential
- Microground slows decline in instant coffee sales
- Coffee pod sales show strong growth
- Ageing population who are more likely to make more coffee at home
- Coffee shop competition and strong sales of coffee makers
Market Size and Forecast
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- Ground coffee and pods boost total sales
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- Figure 8: UK retail value and volume sales of coffee*, 2011-21
- Room for more growth in coffee sales
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- Figure 9: Best- and worst-case forecast of UK retail value sales of coffee*, 2011-21
- Forecast methodology
Segment Performance
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- Microground helps reduce rate of decline in instant coffee sales
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- Figure 10: UK retail value and volume sales of instant coffee, 2011-21
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- Figure 11: Best- and worst-case forecast of UK retail value sales of instant coffee, 2011-21
- Ground coffee sees small increase in sales
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- Figure 12: UK retail value and volume sales of ground coffee/coffee beans, 2011-21
- Figure 13: Best- and worst-case forecast of UK retail value sales of ground coffee/coffee beans, 2011-21
- Coffee pod sales growing strongly
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- Figure 14: UK retail value and volume sales of coffee pods, 2011-21
- Figure 15: Best- and worst-case forecast of UK retail value sales of coffee pods, 2011-21
Market Drivers
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- Ageing population could benefit in-home coffee consumption
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- Figure 16: Trends in the age structure of the UK population, 2010-20
- Competition from coffee shops
- Coffee consumption steadily increasing
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- Figure 17: UK household purchases of tea, coffee and cocoa, hot chocolate and malt drinks, 2001-14
- Strong sales of coffee makers
Key Players – What You Need to Know
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- Nestlé maintains big lead in instant coffee market
- Taylors and Lavazza leading brands in ground coffee
- Pods grow share of NPD activity
- Nescafé launches Azera Coffee to Go
- Tassimo launches more co-branded products
- Increase in spending on coffee advertising
- Nescafé most advertised and trusted coffee brand
- Stronger association with social responsibility for Kenco
Market Share
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- Nestlé continues to dominate instant coffee market
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- Figure 18: Leading manufacturers’ sales and shares in the UK retail instant coffee market, by value, 2014/15 and 2015/16
- Figure 19: Leading manufacturers’ sales and shares in the UK retail instant coffee market, by volume, 2014/15 and 2015/16
- Azera fuels Nescafé’s sales
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- Figure 20: Leading brands’ sales and shares in the UK retail instant coffee market, by value, 2014/15 and 2015/16
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- Figure 21: Leading brands’ sales and shares in the UK retail instant coffee market, by volume, 2014/15 and 2015/16
- Taylors and Lavazza biggest brands in ground coffee
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- Figure 22: Leading brands’ sales and shares in the UK retail ground coffee/coffee beans market (excluding coffee pods), by value, 2014/15 and 2015/16
- Figure 23: Leading brands’ sales and shares in the UK retail ground coffee/coffee beans market (excluding coffee pods), by volume, 2014/15 and 2015/16
Launch Activity and Innovation
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- Pods grow share of NPD activity
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- Figure 24: New product launches in the UK coffee market, by format type, 2012-16
- Branded launches increasingly dominant
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- Figure 25: New product launches in the UK coffee market, by branded vs. private label, 2012-16
- Nestlé puts focus on new flavours for pods and café-style coffees
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- Figure 26: Examples of launches in the UK coffee market by Nestlé, 2016
- Jacobs Douwe Egberts focuses on Tassimo
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- Figure 27: New product launches in the UK coffee market, by company (top 12)*, 2012-16
- Taylors launches Nespresso-compatible pods range
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- Figure 28: Examples of launches in the UK coffee market by Taylors of Harrogate and Lavazza, 2015
- Own-label activity focuses on coffee mixes
- Ethical and time-saving claims on the increase
- Limited editions taking a small but growing share of launch activity
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- Figure 29: New product launches in the UK coffee market, by claim (top 15)*, 2012-16
Brand Communication and Promotion
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- Increase in 2015 advertising for coffee
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- Figure 30: Recorded above-the-line, online display and direct mail total advertising expenditure on coffee, 2012-16
- Nestlé top advertiser but share of spending down
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- Figure 31: Recorded above-the-line, online display and direct mail total advertising expenditure on coffee, by advertiser, 2012-16
- Emotive campaign for Nescafé Gold Blend
- Kenco message focuses on Coffee vs. Gangs project
- Lavazza sees big increase in advertising
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- Figure 32: Recorded above-the-line, online display and direct mail total advertising expenditure on coffee, by 10 highest-spending brands, 2015
- 2016 push for new Azera Coffee to Go
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 33: Attitudes towards and usage of selected brands, July 2016
- Key brand metrics
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- Figure 34: Key metrics for selected brands, July 2016
- Brand attitudes: Kenco seen as most socially responsible brand
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- Figure 35: Attitudes, by brand, July 2016
- Brand personality: Taylors seen as more exclusive than other brands
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- Figure 36: Brand personality – Macro image, July 2016
- Nescafé seen as the most reassuring brand
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- Figure 37: Brand personality – Micro image, July 2016
- Brand analysis
- Authenticity a key strength for Taylors of Harrogate
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- Figure 38: User profile of Taylors of Harrogate, July 2016
- Lavazza seen as a vibrant, stylish and fun brand
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- Figure 39: User profile of Lavazza, July 2016
- Douwe Egberts’ strengths are quality and taste
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- Figure 40: User profile of Douwe Egberts, July 2016
- Nescafé the most trusted coffee brand
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- Figure 41: User profile of Nescafé, July 2016
- Kenco socially responsible but needs more product differentiation
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- Figure 42: User profile of Kenco, July 2016
The Consumer – What You Need to Know
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- Nearly eight in 10 people drink coffee made at home
- Strong brand loyalty among coffee buyers
- Free samples most likely to encourage experimentation
- Room for more added flavours and on-the-go convenience
- Cold-brew coffees can go beyond being niche
- Time-saving appeal of instant coffee but quality important
- Coffee shop culture influencing consumer tastes
- Competition from more refreshing drinks
- Room for more growth in coffee pod sales
- Breaking down barriers to owning pod machines
Frequency of Drinking Coffee Made at Home
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- Nearly eight in 10 people drink coffee made at home
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- Figure 43: Types of coffee drunk at home, overall use and at least once a day, July 2016
- Microground coffee bridging gap between instant and ground
- Three in 10 people using pods for making coffee
- Standard instant coffee drunk the most frequently
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- Figure 44: Frequency of drinking coffee at home, by type, July 2016
- Younger people more likely to drink a variety of coffee types
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- Figure 45: Repertoire of different types of coffee drunk in the last month, July 2016
Factors Influencing Choice
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- Most buyers of coffee are loyal to one product
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- Figure 46: Buying one coffee product vs. buying different coffee products, July 2016
- Free samples can help encourage experimentation
- Getting people talking about new coffees
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- Figure 47: Prompts that would encourage people to buy a different coffee type/brand, July 2016
- Promotional activity has a big influence on choice of coffee
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- Figure 48: Most important factors influencing choice when buying one coffee type/brand over another, July 2016
Interest in Trying New Product Concepts
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- Room for more added flavours in instant coffee
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- Figure 49: Interest in trying different coffee products, July 2016
- Concentrated products and flavours for adding to coffee appeal
- Nearly a fifth interested in on-the-go coffee mixes in a cup
- Cold-brew coffees can help brands win over 16-34s
- Functional benefits can add to the appeal of coffee
Attitudes towards Coffee
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- Instant coffee appeals when consumers are pressed for time
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- Figure 50: Attitudes towards coffee, July 2016
- Coffee shop culture influencing consumer coffee tastes
- Coffee competes against more refreshing drinks
Ownership of Coffee Pod Machines and Barriers to Buying
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- Three in 10 households have a pod machine
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- Figure 51: Ownership of coffee pod machines, July 2016
- Price of pod machines and pods still a barrier to buying
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- Figure 52: Reasons for not currently owning a coffee pod machine, July 2016
- Persuading people to have more hot drinks
- Convincing people of the convenience of pod machines
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 53: Best- and worst-case forecast of total UK retail value sales of coffee*, 2011-21
- Figure 54: Best- and worst-case forecast of total UK retail volume sales of coffee*, 2011-21
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- Figure 55: Best- and worst-case forecast of total UK retail volume sales of coffee*, 2011-21
- Fan chart forecast
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Appendix – Segment Performance
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- Figure 56: Best- and worst-case forecast of UK retail value sales of instant coffee, 2011-21
- Figure 57: Best- and worst-case forecast of UK retail volume sales of instant coffee, 2011-21
- Figure 58: Best- and worst-case forecast of UK retail volume sales of instant coffee, 2011-21
- Figure 59: Best- and worst-case forecast of UK retail value sales of ground coffee/coffee beans, 2011-21
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- Figure 60: Best- and worst-case forecast of UK retail volume sales of ground coffee/coffee beans, 2011-21
- Figure 61: Best- and worst-case forecast of UK retail volume sales of ground coffee/coffee beans, 2011-21
- Figure 62: Best- and worst-case forecast of UK retail value sales of coffee pods, 2011-21
- Figure 63: Best- and worst-case forecast of UK retail volume sales of coffee pods, 2011-21
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- Figure 64: Best- and worst-case forecast of UK retail volume sales of coffee pods, 2011-21
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Appendix – Launch Activity and Innovation
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- Figure 65: New soluble/instant coffee product launches, by branded vs. private label, 2012-16
- Figure 66: New ground coffee product launches, by branded vs. private label, 2012-16
- Figure 67: New product launches of coffee bags, pods and pre-filled filters, by branded vs. private label, 2012-16
- Figure 68: New coffee mixes product launches, by branded vs. private label, 2012-16
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